first failure no recovery can be had even for a breach of a subsequent instalment, 35 and the same rule has been applied in some cases in the United States. 36 It seems, however, a fairer construction of such a provision-obviously intended as it is solely for the advantage and security of the creditor to hold that the acceleration of maturity does not occur unless the creditor so elects, even though in terms the provision is absolute. Often the contract expressly gives the creditor an election. There can then be no question that the statute does not run on the entire obligation from the first default unless the creditor has manifested an intent that maturity of the later instalments shall be accelerated. 38 But when the election is manifested the statute will run from the date of the default on which the election is based, not from the date of the election itself. 39

37

35 Hemp v. Garland, 4 Q. B. 519; Reeves v. Butcher, [1891] 2 Q. B. 509; McFadden v. Brandon, 8 Ont. L. Rep. 610; Manitoba &c. Co. v. Daly, 10 Manitoba L. Rep. 425.

36 Canadian Birkbeck &c. Co. v. Williamson (Idaho), 186 Pac. 916; Sturgis First Nat. Bank v. Peck, 8 Kan. 660; Douthitt v. Farrell, 60 Kan. 195, 56 Pac. 9; Snyder v. Miller, 71 Kan. 410, 80 Pac. 970, 69 L. R. A. 250, 114 Am. St. Rep. 489; Spesard v. Spesard, 75 Kan. 87, 88 Pac. 576; Van Arsdale-Osborne Co. v. Martin, 81 Kan. 499, 106 Pac. 42; Ryan v. Caldwell, 106 Ky. 543, 50 S. W. 966; Central Trust Co. v. Meridian Light & Ry. Co., 106 Miss. 431, 63 So. 575, 51 L. R. A. (N. S.) 151; Green v. Frick, 25 S. Dak. 342, 126 N. W. 579; San Antonio Real Estate, etc., Assoc. v. Stewart, 94 Tex. 441, 61 S. W. 386, 86 Am. St. Rep. 864; Kelly v. Kershaw, 5 Utah, 295, 14 Pac. 804; Pierce v. Shaw, 51 Wis. 316, 8 N. W. 209.

37 Moline Plow Co. v. Webb, 141 U. S. 616, 35 L. Ed. 879, 12 Sup. Ct. 100; Richardson v. Warner, 28 Fed. 343; Keene Five Cents Sav. Bank v. Reid, 123 Fed. 221, 59 C. C. A. 225; Phillips v. Taylor, 96 Ala. 426, 11

So. 323; Mason v. Luce, 116 Cal. 232, 48 Pac. 72; Richards v. Daley, 116 Cal. 336, 48 Pac. 220; Lovell v. Goss, 45 Colo. 304, 101 Pac. 72, 22 L. R. A. (N. S.) 1110, 132 Am. St. Rep. 184; Watts v. Hoffman, 77 Ill. App. 411; Watts v. Creighton, 85 Ia. 154, 52 N. W. 12; Lowenstein v. Phelan, 17 Neb. 429, 22 N. W. 561; Cox v. Kille, 50 N. J. Eq. 176, 24 Atl. 1032; Copehart v. Dettrick, 91 N. C. 344; Batey v. Walter, (Tenn.), 46 S. W. 1024; White v. Krutz, 37 Wash. 34, 79 Pac. 495.

38 Sherwood v. Wilkins, 65 Ark. 312, 45 S. W. 988; Blakeslee v. Hoit, 116 Ill. App. 83; Insurance Co. of N. Am. v. Martin, 151 Ind. 209, 51 N. E. 361; York-Ritchie &c. Co. v. Mitchell, 6 Kan. App. 317, 51 Pac. 57; Fisher v. Spillman, 85 Kan. 552, 118 Pac. 65; Heburn v. Reynolds, 73 N. Y. Misc. 73, 132 N. Y. S. 460; Quackenbush v. Maples, 123 N. Y. App. D. 242, 107 N. Y. S. 1047; Bowman v. Rutter, (Tex. Civ. App.), 47 S. W. 52; Clause v. Columbia &c. Assoc., 16 Wyo. 450, 95 Pac. 54.

39 Lovell v. Goss, 45 Colo. 304, 101 Pac. 72, 22 L. R. A. (N. S.) 1110, 132 Am. St. Rep. 184.

§ 2026. Continuing securities.

Though it seems that generally on breach of a unilateral or independent promise other than for the payment of money as well as on breach of a bilateral contract, a right of action arises in substitution for the contract itself, if the breach is either necessarily material or is accompanied by total repudiation, 40 there is at least one case where that is not true. Where the purpose of a unilateral or independent obligation, as an insurance policy, a fidelity bond or continuing guaranty is to give continuing security the law does not allow the purpose of the parties to be defeated by the substitution of a single right of action for the obligation, as soon as a material breach has occurred. In such a case each breach gives rise to a separate cause of action. 41

40 In Schell v. Plumb, 55 N. Y. 592, an action for breach of a contract to support the plaintiff for life, the consideration for the promise having been fully performed, the court said of the defendant's obligation: "That was a continuing contract during that period, but the contract was entire and a total breach put an end to it, and gave the plaintiff a right to recover an equivalent in damages."

On the other hand, in McCay v. McDowell, 80 Iowa, 146, 45 N. W. 730, the court, while admitting that an action for damages for the entire value of such a contract for support might have been maintained more than the statutory period prior to the action, held that though recovery must be limited to damages sustained within the statutory period, the fact that more than that period had elapsed from the defendant's repudiation of the contract did not bar the action altogether.

In Whitley v. Whitley's Admr., 26 Ky. L. R. 134, 80 S. W. 825, a similar ruling was made, though the evidence did not so clearly indicate any absolute repudiation by the defendant prior to the statutory period.

Cf. with these decisions, Davis v. Brown, 98 Ky. 475, 32 S. W. 416, 36 S. W. 534, where an action for damages for breach of a contract not to sell buggies in a particular town was held barred after the lapse of five years from the date of the contract, the defendant having continuously disregarded the contract from the time it was made. The fact that the breaches for which the plaintiff sought to recover occurred within the statutory period was held not to prevent the statute from operating as a bar.

41 In Green v. Petersen, 218 N. Y. 280, 112 N. E. 746, the court said of a fidelity bond: "We think that the bond was intended as a continuing security; that each breach as it was committed gave rise to a separate cause of action; and that the loss through lapse of time of the remedy for one wrong has therefore no effect upon the remedy for the others. Austin v. Moore, 7 Metc. 116; McKim v. Glover, 161 Mass. 418, 421, 37 N. E. 443; Thayer v. Keyes, 136 Mass. 104; Deposit Bank of Midway's Assignee v. Hearne, 104 Ky. 819, 48 S. W. 160. [See also Sanders v. Coward, 13 M. & W. 65, 71.] The defendant refers to cases in which it has been

§ 2027. Where the plaintiff elects to continue performance of

a contract.

After a material breach by the defendant, of a contract sounding in damages, it may be supposed either that the wrongdoer wishes to continue performance or that he does not wish to do so. In the first case the injured party may always elect to continue performance if he so desires, 42 and if, thereafter, another breach occurs, an action may be maintained for entire damages suffered by the defendant's failure to complete the performance of the contract, or for recovery of the consideration paid by the plaintiff on the theory of rescission and restitution, although more than the statutory period has elapsed since the first breach.43 In an action on the contract, however, it seems that no damages can be recovered for the earlier breach.

If the defendant is unwilling to continue performance, having indicated this by the character of the breach which he has committed, or by repudiation or otherwise, the injured person

held that, however numerous the breaches assigned in the complaint, the cause of action on such a bond is single and entire. Lyman v. Broadway Garden Hotel Co., 33 N. Y. App. Div. 130, 53 N. Y. S. 347; State v. Davis, 35 Mo. 406; but there is nothing in those cases hostile to our conclusion. Causes of action divisible and separate as they arise, may, after they have arisen coalesce, and, at least for some purposes, become inseparable and single. The rule against splitting a cause of action is an everyday example of that truth. The seller of goods may sue for for each instalment of the price as it matures; but if he waits till a later instalment becomes due, he must combine all that are in default. Secor v. Sturgis, 16 N. Y. 548; Perry v. Dickerson, 85 N. Y. 345, 348, 39 Am. Rep. 663; Lorillard v. Clyde, 122 N. Y. 41, 45, 25 N. E. 292, 19 Am. St. Rep. 470. The landlord who sues for rent is subject to like restrictions. Kennedy v. City of New York, 196 N. Y. 19, 89 N. E. 360, 25 L. R. A. (N. S.) 847. But

the rule against splitting does not mean that because the remedy for one instalment is lost through lapse of time, the remedy for later instalments is also lost. The only penalty for omitting an instalment which could have been included is that it may not be sued upon again. It is in this sense that successive breaches of the same bond create a single cause of action. The remedy for one breach may slip by without prejudice to the remedy for others. For the purpose of measuring the effect of the Statute of Limitations, the wrongs are distinct and severable." 42 See supra, § 683.

43 In Richter v. Union Land, etc., Co., 129 Cal. 367, 375, 62 Pac. 39, the court said: "The plaintiff was not bound to treat the contract as abandoned on the first breach of it, or on any particular breach, but had his election still to rely upon it. The statute could not begin to run until he made his election to rely no longer upon the contract and to sue for the money paid to the defendant under it."

should never be allowed to continue performance where by so doing he will enhance damages.44 But as matter of positive law he is allowed to do so in some jurisdictions in case of anticipatory repudiation, 45 and perhaps in other instances, It must be true that wherever a plaintiff has such a right of election, his remedy for breach of the contract will not be barred until the statutory period has run from the ultimate breach. 46

On the other hand, assuming that he has a right of election, a manifestation of an intent to abandon the contract will make the statute run from the earlier breach, 47-48

§ 2028. Contracts for continuous determinate performance. Where one of the parties to a contract has rendered continuous services extending over a period of time, and the contract makes no provision for payment in instalments, it may be supposed:

(a) That the promise to pay for the service in question is indivisible and that no right of action on the contract will arise until the performance has been rendered;

(b) That the defendant's promise though not in terms divisible and though specifying no precise times for payment would support an action after partial performance for the price or value of what was done.

Though these two situations are logically distinct, they are not always easy to distinguish in practice. For the first case, no exceptional rule is needed. No contractual liability arises until the end of the service, though it is true that in many jurisdictions the plaintiff might maintain an action for the benefit which the defendant had received by partial performance even though no definite price were fixed by the contract for each part.49 But this fact will not preclude recovery on the contract at the end of the service in question, or at any time within the statutory period thereafter, for the value or price of the whole performance, though part of it was rendered prior to the statutory period. And this is true not only where the defendant's promise is in terms to pay after the end of the service, 50 but generally also where there is only such a general promise to pay as is implied from a request to perform defined services, 51 as where an attorney is employed to conduct a

47, 48 McCurry v. Purgason, 107 N. Car. 463, 471, 87 S. E. 244, Ann. Cas. 1918 A. 907, 911. See also Messier v. Messier, 34 R. I. 233, 82 Atl. 996.

49 See supra, §§ 1473-1477.

50 Myers v. Saltry, 163 Ky. 481, 173 S. W. 1138, Ann. Cas. 1916 E. 1134; Benge's Adm. v. Fouts, 163 Ky. 796,

174 S. W. 510; Whitehead v. Rhea (Tex. Civ. App.), 168 S. W. 460. See also Scott v. Wilson (Iowa), 170 N. W. 761.

51 Whitehead v. Lord, 7 Exch. 691; Carte v. Carter, 28 Ill. App. 340; Littler v. Snuley, 9 Ind. 116; Carroll v. McCoy, 40 Ia. 38; In re Oldfield's Est., 158 Ia.